Tens of thousands of supporters of Mir Hossein Mousavi stream through the centre of Tehran on Monday, protesting against election results that declared President Mamoud Ahmadinejad the winner. (Kamran Jebreili/Associated Press)

Iran's state radio says seven people died in clashes in Tehran after an "unauthorized gathering" following a mass rally over alleged election fraud.

The radio report said the seven died in shooting that erupted after several people at the gathering Monday night in western Tehran "tried to attack a military location."

More than 100,000 opponents of President Mahmoud Ahmadinejad had marched through Tehran earlier Monday protesting alleged vote-rigging in last week's elections.

The report Tuesday gave no details. It was the first official confirmation of the shooting in Tehran's Azadi Square.

Witnesses there saw at least one person shot dead and several others seriously wounded after shooting from a compound for volunteer militia linked to Iran's powerful Revolutionary Guard.

People had defied a government order and gathered downtown, hours after the country's supreme leader ordered an investigation into allegations of election fraud.

Reuters news agency quoted residents as saying they heard gunfire in three districts in the city's north. The reports could not be independently confirmed.

Witnesses reported the streets in the capital's downtown were packed with supporters of reformist candidate Mir Hossein Mousavi. They were dressed in green and chanting "Mousavi, take back our votes."

Some demonstrators shouted they would protest every day if Ahmadinejad remains president after his landslide re-election on Friday that resulted in widespread accusations of vote-rigging.

"It's not just about Mousavi. It's about democracy, it's about republic," one protester told CBC News.

A man lies on the back of a taxi after being seriously injured by gunfire in an area where pro-government militia were firing shots in the air at a rally supporting Mousavi in Tehran on Monday. (Associated Press)According to government officials, Ahmadinejad won 62.6 per cent of the vote, while Mousavi garnered 33.75 per cent in a contest that appeared to divide urban and rural voters.

Ayatollah Ali Khamenei was quoted as saying on state television Monday that Iran's Guardian Council will examine the allegations.

Mousavi wrote an appeal Sunday to the Guardian Council, a powerful 12-member body that's a pillar of Iran's theocracy. Mousavi also met Sunday with Khamenei.

"Issues must be pursued through a legal channel," said Khamenei, insisting "that the Guardian Council carefully probe this letter."

'Not very optimistic'

It is not immediately clear how the election probe by the clerical panel will proceed or how long it will take. But some analysts have said chances of wiping out the election results are very remote.

"I have appealed to the Guardian Council but I'm not very optimistic about their judgment," Mousavi was quoted as saying on his website.

"Many of its members during the election were not impartial and supported the government candidate," said the online posting, referring to Ahmadinejad.

The European Union issued a statement on Monday urging that the investigation fully answer the complaints that have been raised.

"It is essential that the aspirations of the Iranian people are achieved through peaceful means and that freedom of expression is respected," the statement said.

U.S. President Barack Obama said Monday it's up to Iran to determine its leaders. He also said he is troubled by the situation in that country and that any investigation into the election results must not result in bloodshed.

Cannon calls for 'fully transparent' investigation

Foreign Affairs Minister Lawrence Cannon released a statement saying Canada is "deeply troubled by the current situation in Iran" and calling for a "fully transparent investigation into electoral discrepancies."

"The banning of opposition protests and security forces' heavy-handed treatment of demonstrators throughout the country are also matters of grave concern," the statement said.

Cannon also said Ottawa has called in Iran's chargé d'affaires over reports from Canadian journalist George McLeod that he was detained and beaten by Iranian authorities before being released. McLeod was doing freelance work for the Globe and Mail.

UN Secretary General Ban Ki-moon also said Monday the will of the Iranian people should be fully respected. The aftermath of the presidential election is being closely monitored, Ban said.

Election results must be authorized by the council, composed of clerics closely allied with the unelected supreme leader. All three of Ahmadinejad's challengers in the election — Mousavi and two others — have made public allegations of fraud after results showed the president winning by a 2-to-1 margin.

Rally declared illegal

Khamenei urged Mousavi to pursue his appeal "calmly and legally," state television reported.

Supporters of reformist presidential candidate Mir Hossein Mousavi carry his poster during a rally in Tehran on Monday. (Kamran Jebreili/Associated Press)The Interior Ministry declined to grant permission for the rally, which Mousavi supporters had promoted in leaflets handed out over the weekend.

Mousavi's website declared the rally postponed. But officials reported more than 100,000 people ignored the ministerial ban and gathered to await Mousavi, who said he would go to the site to ensure supporters remain calm.

Mousavi, in a gray striped shirt and talking through a portable loudspeaker, had paused on the edge of the square — where Ahmadinejad made his first post-election speech — to address the throng. They roared back: "Long live Mousavi."

"I just want to show the president that we are not bandits. I want my vote back," Maryam Sedaghati told Reuters.

Mousavi, who served as prime minister during the 1980s, will be responsible for any consequences rootings from the rally, the Interior Ministry said.

Security clampdown

Mousavi and his supporters have shown no sign of backing down against an expanding security clampdown — bringing their rage to the streets for two straight days.

Ahmadinejad has dismissed the rallies as little more than "passions after a soccer match."

The European Union urged Iran on Monday not to use violence against those protesting.

Overnight, police and hardline militia stormed the campus at the city's biggest university, ransacking dormitories and arresting dozens of students angry over what they say was mass election fraud.

The nighttime gathering of about 3,000 students at dormitories of Tehran University started with students chanting "Death to the dictator," but it quickly erupted into clashes as students threw rocks and Molotov cocktails at police.

Police fought back with tear gas and plastic bullets, said a 25-year-old student at the university who witnessed the fighting. He would only give one name, Akbar, out of fears for his safety.

The students set a truck and other vehicles on fire and hurled stones and bricks at the police, he said. Hardline militia volunteers loyal to the Revolutionary Guard stormed the dormitories, ransacking student rooms and smashing computers and furniture with axes and wooden sticks, Akbar said.

Before leaving at about 4 a.m., the police took away memory cards and computer software material, Akbar said, adding that dozens of students were arrested.

One of Mousavi's websites said a student protester was killed early Monday during clashes with plainclothes hardliners in Shiraz, southern Iran. But there was no independent confirmation of the report. There also have been unconfirmed reports of unrest breaking out in other cities across Iran.

With files from The Associated Press